How to Get Same Day Options on Robinhood

Imagine waking up and realizing you need to make a quick financial move before the market closes. You check your phone, and within minutes, you've bought an option that expires the same day. The potential is huge—fast profits, but also fast losses. But how do you get there? How do you make informed decisions on Robinhood, especially if you're new to same-day options trading?

Robinhood makes it incredibly easy for anyone to trade options, and same-day options—often called "0DTE" (Zero Days to Expiration)—are especially enticing for those who want immediate returns. But it’s not just about clicking a few buttons. Understanding how to pick the right options, assessing risks, and making smart moves is essential.

Understanding Same-Day Options

Same-day options are contracts that expire at the close of the market on the day you buy them. These options are high-risk, high-reward instruments that require sharp market insight and a cool head. Unlike buying a stock, where you can hold onto your investment indefinitely, options have an expiration date. Same-day options, as the name suggests, expire that same day. Their prices fluctuate wildly as expiration nears, offering the chance for substantial gains—or losses—within hours.

To trade same-day options on Robinhood, you need to meet specific requirements and understand the platform’s interface, particularly its options trading section.

Step-by-Step Guide: How to Trade Same-Day Options on Robinhood

1. Enable Options Trading on Robinhood

   If you haven’t already enabled options trading, you’ll need to do so. Go to your account settings, and request to trade options. Robinhood may ask you a few questions about your investment experience, risk tolerance, and financial situation to determine if you're eligible for options trading.

2. Understand the Risks of Same-Day Options

   Same-day options can be incredibly volatile. The closer an option gets to its expiration, the more its value fluctuates. This is known as "theta decay," meaning the time value of the option decreases quickly as the expiration time approaches. Options that expire today are especially sensitive to market movement, making them a double-edged sword: you could win big, but you could also lose your entire investment in hours.

3. Find Same-Day Options on Robinhood

   Once you're approved for options trading, finding same-day options is straightforward. Open the app, search for a stock, and select the "Trade Options" button. Look for expiration dates that are set for today. Typically, you'll find these for major stocks and ETFs, especially if it's a weekday and near market close.

4. Choosing the Right Strategy: Buying Calls vs. Puts

   On Robinhood, there are two primary ways to trade same-day options:

   • Buy a Call Option: If you believe the stock price will rise before the market closes, you can buy a call option. If the stock’s price exceeds the strike price before the option expires, you could profit by exercising the option or selling it for a higher premium.

   • Buy a Put Option: If you think the stock price will drop, you can buy a put option. If the stock’s price falls below the strike price before expiration, you could make a profit.

   Both strategies carry risks, especially on the same day, because price movements can be unpredictable. To mitigate these risks, many traders use a combination of technical analysis, news updates, and gut feeling.

5. Monitoring and Selling Same-Day Options

   Once you've purchased your same-day option, it’s crucial to monitor its price in real-time. Options prices can fluctuate dramatically, and it’s not uncommon to see rapid gains or losses within minutes. As soon as you hit your desired profit margin, consider selling the option to lock in your gains. The alternative—waiting too long—could result in losing everything.

6. Know When to Exit

   Timing is everything when trading same-day options. Don’t get greedy. If your option's value spikes and you’ve hit your profit target, consider closing the position. Even a few minutes of hesitation can turn a profitable trade into a loss.

7. Using Limit Orders and Stop-Losses

   One way to protect yourself is by using limit orders and stop-losses. Robinhood allows you to set a limit order that automatically sells your option once it hits a specified price. This can be useful for same-day options, where prices fluctuate rapidly. Similarly, a stop-loss will automatically sell your option if its value drops below a certain threshold, helping to limit your losses.

Strategies for Same-Day Options Success

To succeed with same-day options trading, having a strategy is crucial. Here are a few popular strategies among day traders on Robinhood:

• Scalping: This strategy involves making multiple quick trades throughout the day, profiting from small price movements. Same-day options are ideal for scalping because of their volatility.

• Momentum Trading: With this strategy, traders look for stocks that are making strong moves in either direction and ride the momentum. Same-day options can benefit from these sharp moves, but they require quick decision-making.

• Gamma Scalping: Advanced traders often use gamma scalping to hedge their positions, using short-term price movements to lock in profits. This is more complex and requires deep knowledge of options trading.

Risk Management Tips

• Only invest what you can afford to lose. Same-day options can be unpredictable, and it’s possible to lose your entire investment in a single trade.

• Use a small portion of your portfolio for same-day options trading. Many experienced traders dedicate only a small fraction of their total portfolio to same-day options, mitigating their overall risk.

• Stay updated on market news. Same-day options trading is heavily influenced by real-time market events, so having a pulse on the latest news can help you make smarter trades.

• Never chase losses. If you lose money on a same-day option, don’t try to make it all back by throwing more money into the market. Stick to your strategy and risk tolerance.

Real-Life Example of Same-Day Options Trading

Let’s say you believe Apple’s stock will rise after an upcoming product launch event scheduled for today. You buy a same-day call option on Robinhood with a strike price of $175. The stock is currently trading at $173. If the stock rises to $176 before the market closes, you could sell your option for a profit, provided the premium has increased.

However, if Apple’s stock doesn’t move as expected or drops in value, you may see your option’s value plummet, resulting in a total loss by the end of the day.

Conclusion: The Thrill and Risk of Same-Day Options

Same-day options trading on Robinhood is an exhilarating but risky strategy. It offers the potential for quick gains, but without a well-thought-out approach and strong risk management, it’s just as easy to lose your investment. As with any form of trading, research, preparation, and discipline are key to success. By understanding the mechanics of same-day options, having a clear strategy, and using Robinhood’s tools effectively, you can give yourself a better chance of profiting in this fast-paced environment.